The development of business angel networks in Latin American countries: the case of Chile

Abstract

This article analyses the recent development of business angel networks (BANs) in Chile, in order to understand the limitations of the current public policies to encourage informal venture capital and especially the BANs. We describe the evolution of this policy and apply a semi-structured interview to managers of Chilean BANs. The poor results in total investments in the case of Chilean BANs allow us to understand how government programmes exclusively oriented towards the supply of the informal venture capital market are insufficient to promote the dynamism of this industry. It is necessary to implement articulated programmes both from the supply and demand side, accompanied by the continuous evaluation of their results.

Keywords:

• investment readiness
• informal venture capital
• Chile
• business angel networks

Acknowledgements

We thank the managers of BANs for their availability to answer the questions and also Professor Colin Mason for his comments, suggestions and contributions to improve this paper.

Notes

¹ However, there are also a small number of cross-border BANs (EBAN 2011).

² Innova Bío Bío is the Technological Innovation Fund Committee of the Region of Bío Bío, a pioneering regional institution, born in 2001 as a result of an agreement between the regional government, the Ministry of the Economy and CORFO, and is oriented towards promoting innovation and the transfer of technological capacities in the Region of Bío Bío. It operates independently from Innova Chile. It is important to point out that this is the only region in all of Chile that has an Innova Committee. The other 14 regions are governed by the dispositions of Innova Chile.

³ It is important to point out that as of that date the Proyecta Chile and Ángeles del Sur networks did not make any investment.

⁴ For Endeavour, a high-impact entrepreneur is one with an internationally scalable project and with a global vision.